The most important attribute of a cash reserve is its availability in time of sudden need. And while a federally insured savings account is considered one of the safest places to put money being reserved for emergencies, when interest rates are low, you may want to consider other alternatives.

When selecting ways to invest your cash reserve, you should balance your liquidity needs with potential returns. Short-term investment instruments, such as Treasury bills, certificates of deposit, and money market mutual funds, can provide you with the liquidity needed to meet expected and unexpected expenses and to increase your short-term investment income.

By actively managing your short-term cash reserves, you can provide a means of saving for the future. You can use this money to increase your net worth with little or no additional risk to your principal. It's important to remember that since income and personal circumstances are subject to change, you should conduct a periodic review of your cash reserve and its structure.

Note: Treasury bills are backed by the full faith and credit of the U.S. government as to the timely payment of principal and interest.

Bank CDs are insured by the FDIC for up to $250,000 per depositor, per insured institution in interest and principal.

Money market funds are neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although money market funds seek to preserve the value of your investment at $1 per share, it is possible to lose money by investing in mutual funds.

Mutual funds are sold by prospectus. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the investment company, can be obtained from your financial professional. Be sure to read the prospectus before deciding whether to invest.

Prepared by Broadridge Advisor Solutions Copyright 2022.

You may also like

Systematic Saving to Establish or Increase Cash Reserve
Systematic Saving to Establish or Increase Cash Reserve
26 August, 2020

What is systematic saving? As its name implies, systematic saving is the process of saving a portion of income on a regu...

Choosing Investments for Your Retirement Savings Plan
Choosing Investments for Your Retirement Savings Plan
16 November, 2023

Your employer-sponsored retirement plan offers a variety of investments to choose from. How do you know which ones may b...

8 Tips For Managing your Organizations Retirement Plan
8 Tips For Managing your Organizations Retirement Plan
4 May, 2021

Who Are We A familiar recurring comment we hear from clients and Plan Sponsors is that it is hard to tell financial advi...